UPDATE 1-India's Reliance signs n. Iraq oil contract-source

By Nidhi Verma

NEW DELHI, Oct 29 (Reuters) - Even as Turkish troops mass on the border of northern Iraq, India's Reliance (RELI.BO: Quote, Profile, Research) signed a deal on Monday to explore for oil and gas in Iraq's Kurdish region, a senior company official said.

Reliance signed the production sharing contract for two exploration blocks with the semi-autonomous Kurdish Regional Government (KRG), the source said.

"To begin with we will be 100 percent stakeholders but later on Iraq can mandate a company to have a stake in the blocks after discovery in line with their new law," the company official, who declined to be named, said.

"They have been given to us on (a) negotiation basis."

A KRG government spokesman was not immediately available to respond to enquiries about the deal.

Turkey has massed up to 100,000 troops along the Iraqi border in readiness for a possible large scale incursion to hunt 3,000 guerrillas who use Iraq's Kurdish region as a base.

But the KRG is moving ahead with plans to attract international energy companies to explore for oil and gas in the region. It aims to boost oil output to 1 million barrels per day (bpd) in about five years from just a few thousand now.

The KRG said earlier this month it had approved four new oil and gas deals but only gave details of two of them. The four deals were expected to attract around $500 million of investment in exploration.